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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.62 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.62 suggests that the company is not a manipulator.

FLEX' s 10-Year Beneish M-Score Range
Min: -6.71   Max: 1.54
Current: -2.62

-6.71
1.54

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 1.54. The lowest was -6.71. And the median was -2.51.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9199+0.528 * 0.8467+0.404 * 1.2468+0.892 * 1.1464+0.115 * 1.0374
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8595+4.679 * -0.0529-0.327 * 0.9779
=-2.62

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,527 Mil.
Revenue was 6528.517 + 6642.745 + 6723.934 + 7183.442 = $27,079 Mil.
Gross Profit was 377.081 + 380.785 + 362.144 + 398.619 = $1,519 Mil.
Total Current Assets was $8,879 Mil.
Total Assets was $11,920 Mil.
Property, Plant and Equipment(Net PPE) was $2,194 Mil.
Depreciation, Depletion and Amortization(DDA) was $497 Mil.
Selling, General & Admin. Expense(SGA) was $852 Mil.
Total Current Liabilities was $7,056 Mil.
Long-Term Debt was $2,063 Mil.
Net Income was 138.903 + 173.887 + 42.975 + 145.157 = $501 Mil.
Non Operating Income was -2.584 + -44.009 + 38.544 + -29.486 = $-38 Mil.
Cash Flow from Operations was 387.414 + -81.169 + 98.153 + 764.549 = $1,169 Mil.
Accounts Receivable was $2,396 Mil.
Revenue was 6410.106 + 5791.125 + 5295.318 + 6123.321 = $23,620 Mil.
Gross Profit was 368.423 + 311.035 + 195.657 + 246.462 = $1,122 Mil.
Total Current Assets was $8,943 Mil.
Total Assets was $12,004 Mil.
Property, Plant and Equipment(Net PPE) was $2,378 Mil.
Depreciation, Depletion and Amortization(DDA) was $564 Mil.
Selling, General & Admin. Expense(SGA) was $865 Mil.
Total Current Liabilities was $7,377 Mil.
Long-Term Debt was $2,014 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2526.88 / 27078.638) / (2395.989 / 23619.87)
=0.09331636 / 0.10143955
=0.9199

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(380.785 / 23619.87) / (377.081 / 27078.638)
=0.04748447 / 0.05608218
=0.8467

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8879.06 + 2193.966) / 11919.873) / (1 - (8942.896 + 2377.549) / 12004.485)
=0.07104497 / 0.05698204
=1.2468

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=27078.638 / 23619.87
=1.1464

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(564.064 / (564.064 + 2377.549)) / (497.464 / (497.464 + 2193.966))
=0.1917533 / 0.1848326
=1.0374

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(852.178 / 27078.638) / (864.827 / 23619.87)
=0.03147049 / 0.03661438
=0.8595

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2062.926 + 7056.275) / 11919.873) / ((2013.706 + 7377.344) / 12004.485)
=0.76504179 / 0.78229512
=0.9779

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(500.922 - -37.535 - 1168.947) / 11919.873
=-0.0529

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.62 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 0.87880.86170.95081.38450.5811.35120.9140.95611.01371.1532
GMI 0.38281.21090.99281.15431.03180.81930.90711.07611.04550.897
AQI 1.07190.98750.94280.89740.26810.54170.75021.0181.59061.0647
SGI 1.08640.97191.23321.46171.1230.77911.17971.03170.80321.1077
DEPI 1.57990.92951.13440.77690.97890.91511.38680.89870.97211.2246
SGAI 1.0310.90820.9571.00841.08031.00580.8861.06091.14230.9807
LVGI 0.97280.97920.97511.14011.46190.96970.99060.98530.9661.0534
TATA -0.0347-0.0410.0125-0.083-0.6506-0.0733-0.023-0.0268-0.0853-0.0635
M-score -2.90-2.70-2.25-2.14-6.25-2.98-2.59-2.59-2.80-2.56

Flextronics International Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93881.00541.141.01411.14021.09831.07361.15321.01240.9199
GMI 1.03610.93770.96441.04511.10661.19011.04530.8970.85510.8467
AQI 1.38081.56311.88011.59061.22731.12110.92391.06471.15131.2468
SGI 0.94690.86720.83240.80290.84050.90881.00151.10771.15291.1464
DEPI 0.90550.93620.9090.97210.98130.99551.23861.22461.17241.0374
SGAI 1.10411.16371.11791.14161.16541.13571.10070.9870.89590.8595
LVGI 0.95920.92410.94660.9661.01371.05451.0571.05341.00180.9779
TATA -0.017-0.031-0.061-0.0833-0.1015-0.0698-0.0751-0.0693-0.0348-0.0529
M-score -2.51-2.55-2.46-2.79-2.86-2.69-2.78-2.58-2.47-2.62
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